Cause of Delay

Late last year the British High Court delivered a very interesting judgement on the assessment of delay, disruption and prolongation claims.

A delay to an activity may disrupt the work and it may delay the completion of the project. The two factors are independent (this is the fundamental principle in the UK Delay and Disruption Protocol).

In Costain Ltd v Charles Haswell & Partners Ltd [2009] EWHC B25 (TCC) (24 September 2009), the High Court has determined that for prolongation to occur, the actual delay has to flow through to a delay in the completion of the works. The mere fact the delayed activity was on the then critical path when it occurred is not of itself evidence the delay flowed through to the completion of the works. At paragraph 200(ii) the Justice Richard Fernyhough QC stated I find that it has not been shown by Costain that the critical delay caused to the project by the late provision of piled foundations to the RGF and IW buildings necessarily pushed out the contract completion date by that period or at all.

The fundamental issues relate to the definition of the critical path were canvassed inin my 2006 paper ‘Float is it real’.

At page 7 I argued:

Despite the CPM requirement for a single duration estimate, durations are variable; changing the estimate of a planned (future) duration or differences between the actual duration and planned duration on completed activities may change the critical path.

In the example above, at the ‘Initial Claim’ the critical path was running through the top chain of activities and ‘delay x’ was encountered. As no one can predict the future, at the time of the dealay it would be reasonable for everyone involved in the project to assume this is a critical delay and administer the contract accordingly.

Later, changes in the duration of the activities cause the critical path to move (either reduction in the time needed to complete some activities in the top chain or increases in duration in the lower chain, or both). When ‘delay y’ occurs as a ‘Later Claim’, this is also a critical delay based on the schedule at the time of the delay.

However, given the definition of the ‘Critical Path’ is: Generally, it is the longest path through the project. …that determines the duration of the project. The difficult question to answer is what happens to ‘delay x’, it appeared to be critical based on the best information available at the time the delay occurred. But changes over time (and after the time of the initial delay) have shown ‘delay x’ to actually be non-critical.

Certainly based on the Constain’s case, scheduling experts will need to define far more than simply a delay to an activity on the current critical path. As a minimum it will be necessary to show the delay impacted the overall completion and the extent of the impact. It will also be necessary to show the delay caused a general increase in costs for a prolongation claim to be sustained.

One response to “Cause of Delay”

In the NSW Government’s construction procurement system the emphasis had moved sometime ago to regard delay as delay to completion. All claims for delay are contractually assessed in this term, which has simplified disputes enormously. Rather than arguments about the critical path, the only claim is for a contractually established per day sum where there has been delay to completion not caused by the contractor. The contract form GC21 is available at http://www.nswprocurement.com.au/Procurement-System-for-Construction/Standard-form-documents/GC21.aspx